Integrated portfoliomanagement for the deregulated energy market.
BelVis PFM
Trade & Procurement
BelVis for power and gas trading.
Structured procurement, economically optimised
In the deregulated energy market, trade and procurement companies are coming under pressure to decrease their own procurement costs, in the fields of both power and gas trading. When planning own power plant facilities, it is necessary to put thought into multi-commodity markets as well, because the gas, CO2, electricity and control energy markets may be optimised collectively under the boundary conditions of the district heat supply. Generation portfolio management is concerned with achieving the optimum overall combination for profit contribution. The BelVis product family offers an integrated solution platform, in particular for public utility companies, IPPs and industrial companies.
Every distribution agreement concluded on the market is another step towards portfolio management and, before long, the border to operational risk will have been crossed – especially given the constantly increasing number of short-term agreements.
To maintain carefully targeted control of purchases and sales at all times, bearing in mind the anticipated trends in requirements and markets, it naturally follows that it is necessary for trade companies to implement portfolio management if they trade over several control areas/market zones – and often in several countries as a result – and if their trading activities extend beyond pure procurement.
Portfolio-Management with BelVis
Management of sales and trading portfolios, efficient business process handling and an active portfolio strategy which employs superior and powerful forecasting and analytical methods to turn an information advantage into a competitive advantage all require effective computer-supported portfolio management systems:
Contracts and transactions must still be managed well into the future after their conclusion.
Each individual contract has direct effects on the entire portfolio (open positions, schedule and risk management, limits, etc.).
The current contract portfolio is constantly optimised through additional new contracts.
Each individual portfolio is subject to separate risk assessments.
Individualised reporting is required for each portfolio.
For the day-ahead system and schedule management in particular, the time constraints are exceedingly tight.
More productive business processes through integrated data flow
BelVis PFM supports procurement and trade for long and medium-term transactions as well as short-term (day-ahead) or intraday and afterday trading. BelVis PFM can be integrated into broad business processes using BelVis Workflow.
Energy Data Management (EDM), as the base for all data flows in BelVis, handles real value recording (import of system operator message), customer segmentation, forecasting and offer proposal. In the example of a sales portfolio, forecasts of the quantities to be procured are made for BelVis PFM at the highest possible level of detail, using over 20 possible forecasting methods.
Backoffice tasks such as schedule or nomination dispatch are represented in full. Needless to say, invoices received from trading partners are checked (purchases) and outgoing invoices issued (sales). After the system operators have relayed the real values, the balancing group balances may be prepared and control energy transactions drawn up on the basis of the published price time series. If necessary, it is also possible to prepare offer calculations, e.g. for regrouped customers and determine the procurement costs for a portfolio price. Profit contribution calculations by customer group may also be integrated.
The market model for power and gas
The mapping of the respective market structures forms the basis for negotiation, and is included in the BelVis PFM Gas and BelVis PFM Power data models. Transitions between market zones and/or control areas, as well as international transactions such as e.g. the capacities of the transitions, are also included.
In PFM - A transaction for every scenario
Each energy or money transfer is entered in BelVis PFM as a transaction:
Wholesale purchase or sale of energy (trade transactions)
Physical extraction of energy from balancing groups (consumption)
Power transfer between balancing groups belonging to the same person
Power transfer between books, even without any balancing group transfer, and also
Contracts without commitments in electrical power (financial settlement).
Of course, trade transactions also include transactions in terms of Renewable Energy Sources Act quantities and returns, control energy transactions, and spot market transactions. A trade agreement generally covers the following points:
Supply period (e.g. Cal 2006, Q4 2006, May 06, week-ahead, day-ahead)
Supply location (e.g. control area ‘X’)
Buyer and vendor
Negotiated price (average price or price time series)
Any comments (e.g. special agreements on selected points, broker data)
Books structure transactions
A sales and procurement portfolio may be represented in the same client, and scheduled transactions are separated from spot transactions, options and forwards both optically and in accounting. The book structure may be nested into any number of sub-books.
A number of evaluations are available for books. The transaction monitor for example, which contrasts the current purchased and sold quantities in real-time, giving the user an indispensable overview of open positions for various time resolutions (day, month, quarter, year).
Optimisation
Open positions can be separated into their BASE and PEAK components, and automatically optimised using the BelVis OPTRIS add-on module for a tangible increase in confidence when making decisions. The user is provided – in both graph and table form – with an evaluation of the load profile, a breakdown by standard trading products and a price evaluation of the products and remaining “residual quantities”.
In the gas market, the majority of the energy is typically still covered by flexible contracts. This means that the portfolio manager must decide on a daily basis how much energy should be nominated from which contracts. Because of the complexity of the contracts, this task can only be carried out optimally by powerful mathematical algorithms. The BelVis GASOPT add-on module allows you to optimally plan in the complex gas procurement contracts, together with stores and standard products.
Automatic success a day ahead forecasting
Direct and constantly up-to-date calculation of outstanding open positions is a requirement for successful handling of typical day-ahead processes. Creating limited exchange offers and bidirectional direct connection with the XETRA trading system facilitate smooth and above all rapid processing of exchange transactions (EEX, Nordpool, Powernext, etc.).
What’s more, limited offers may be generated automatically, and spot market strategies may also be specified for each individual book. The daily exchange offer can be generated at the touch of a button.
After concluding a spot transaction, the quantities traded on the exchange can be divided amongst the individual books according to the bidding strategy. This also makes cost allocation of the spot quantities to individual books possible.
Schedules and nominations at the touch of a button
The schedules and nominations are calculated fully automatically once the transactions have been entered into BelVis PFM. They can be exported and sent at the touch of a button. Monitoring acknowledgements and any necessary status requests to the receiver are available directly through the easy to use overview screen. The entire scheduling process is represented in full – proven and automatable.
Handling "residual risk"
Risk assessment and management is essential to secure processes and transactions. Middle office risk assessments are a typical example, ideally backed up by the BelVis RISK add-on module with its extensive limit management function and reporting system which can be tailored to any customer requirements. The limit management system in BelVis RISK gives high-speed access to any combination of typical risk measures, such as short/long positions (subdivided into PEAK and OFF-PEAK), delta risk, profit & loss, and VaR.
The BelVis RISK reporting system can even meet typical auditor requirements to retrospectively calculate open positions for a given day in the past.
BelVis PFM helps you keep your portfolios under control, reduce your workload and minimise the risk of individuals becoming unavailable through features such as centralised transaction storage and standardisation of daily processes. Integrated IT structures with optimisation modules bring about significant cost savings.
